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Klobuchar Amendment to Support Community Banks in Wall Street Reform Passes

Thursday, May 13th, 2010 at 5:17 am

Washington, D.C. – The U.S. Senate passed an amendment to the Wall Street reform bill, introduced by Senators Amy Klobuchar (D-MN) and Kay Bailey Hutchison (R-TX), that maintains the Federal Reserve’s supervisory role over community banks. The amendment, which passed by a vote of 90 to 9, ensures that the Federal Reserve’s regional presence is preserved and that local perspectives are maintained.

“The regional Federal Reserve bank system is a two-way street that both provides the Fed with valuable insight into local economies and serves as a voice for our community banks,” Klobuchar said. “This amendment ensures that the institution charged with our nation’s monetary policy has a connection to Main Street, and not just Wall Street.”

The Federal Reserve System currently oversees both small and large financial institutions and uses the 12 regional banks, including the Federal Reserve Bank of Minneapolis, to stay informed of local business conditions. The amendment would also maintain the Federal Reserve’s role in overseeing 5,000 bank-holding companies and 850 state-chartered banks.

“When the pavement on Wall Street began to buckle and collapse, community banks did not panic and run to Washington with tin cups in their outstretched hands,” Klobuchar said. “They did well, both for themselves and for the people they serve. Today, we acted to make sure that these voices, and those who participate in the local economies they serve, continue to be heard.”

The amendment drew strong support from groups like the Independent Community Bankers of America (ICBA), which represents small banks across the country.

“ICBA thanks Sens. Hutchison and Klobuchar for offering this key amendment that maintains the Federal Reserve’s examination authority and allows the regional Federal Reserve Banks to keep their finger on the pulse of the Main Street communities that our nation’s nearly 8,000 community banks serve each and every day,” said Jim MacPhee, chairman of ICB America. “These communities all have diverse regional economies, and the insights provided by the current system are crucial to the Federal Reserve exercising its monetary functions and its ability to gauge the impact of banking regulations across various institutions.”